Ticket refunds drive down Live Nation revenues
Live Nation has reported a 98% fall in its second-quarter revenue for this year, with US$86 million in ticket refunds driving down its year-on-year revenue.
In comparison, the global live entertainment business’ 2019 ticketing revenue, which usually puts on the bulk of its Northern Hemisphere festival season income along with summer tours for major artists in the second quarter, was US$371 million.
With live events industry impacted by the COVID-19 pandemic, Ticketmaster’s parent company claims that 86% of consumers are retaining their tickets.
Live Nation implemented a 30-day refund window for cancelled events in April following a barrage of complaints about denied refunds for events that had been postponed with no new dates due to COVID-19.
Meanwhile, Live Nation claims it has already sold 19 million tickets across 4,000 festivals and concerts for 2021.
The firm has experimented with concepts like drive-in concerts and virtual shows, although Chief Executive Michael Rapino only mentioned the latter in the earnings report.
Rapino advised “in the second quarter, we had 67 million fans view over 18 thousand concerts and festivals globally. Among our highlights, this past weekend we streamed 150 performances for our Virtual Lollapalooza Festival.”
Live Nation has also amended its credit agreement to further suspend its maintenance covenant until 31st December 2021 if it chooses, replacing it with a minimum liquidity test of US$500 million, which is measured against the company’s free cash, available debt capacity, and up to US$250 million of event-related deferred revenue.
The company said it believes this level of liquidity and associated burn rates, along with credit actions, “provide it with the ability to fund operations until the expected return of concerts at scale in the summer of 2021, preceded by ticket sales earlier in the year.”
Commenting on its current status, Rapino noted “over the past three months, our top priority has been strengthening our financial position to ensure that we have the liquidity and flexibility to get through an extended period with no live events.
“Our expectation is that live events will return at scale in the summer of 2021, with ticket sales ramping up in the quarters leading up to these shows.”
During the Coronavirus pandemic, Live Nation has put on socially distanced shows in New Zealand, France, Denmark, Spain, Germany and Finland, as well as several cities across the USA.
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